Providence Resources: H1-17 Results
– September 2 1 , 2017 – Providence Resources P..ll..cc.. (PPVR LN,, PRP ID)),, the Irish based Oil and Gas Exploration Company,, today announces its unaudited interim results for the half year ended June 30,, 2017..
Tony O’Reilly,, Chief Executive Officer commented::
“ The first half of 2017 was an exceptionally busy period for Providence as we completed the extensive consenting and logistical processes for the drilling of the 53//66 – 1 Druid / Drombeg ultra – deepwater exploration wel l . During th is period , we completed a major farm – out deal with Cairn , together with an o ption transaction with TOTA L over FEL 2//114 . We also agreed a farm – out to TOTAL on LO 16//227,, as well as an o ption with Cairn , and we c ontinu ed various commercial discussions on a number of our assets,, most principally our flagship Barryroe project .
The commercial transactions with Cairn and TOTAL provided incremental capital in excess of $445 million to be used for the drilling programme – this not only allowed for the deepen ing of the 53//66 – 1 exploration well to test the Drombeg prospect , but it also significantly reduced our financial exposure to the drilling costs . These transactions also mean that the majority of Providence’s Atlantic Margin assets have been successfully farmed – out to majors in accordance with our corporate strategy,, with Avalon under the operatorship of TOTAL,, Dunquin now under the operatorship of Eni and with TOTAL having an o ption to assume operatorship at FEL 2//114,, which contains the undrilled Diablo prospect . Our last remaining Atlantic Margin asset,, Newgrange,, is the subject of ongoing farm – out discussions .
The drilling of the 53//66 – 1 Druid / Drombeg exploration well was a major operational undertaking for Providence , being situated in the deepest water depth ever drilled offshore n orth – west Europe . Th is is a real credit to the Providence operational team and sub – contractors who worked so diligently to ensur e its safe and environmentally benign delivery . The results from the 53//66 – 1 well were disappointing as , while both reser voir section s were encountered within the pre – drill depth prognosis , both were water bearing.. The possible presence of bitumen was reported in drill cuttings within the Drombeg reservoir interval , which may indicate that it received an oil charge which was not retained at this location.. However,, further studies will be required in order to confirm this interpretation and its implications for the wider prospectivity within FEL 2//114..
At Barry r oe , we have continued farm – in discussion s – but to date , no deal has been consummated.. Whilst discussions continue , the Board ha s taken a decision to advance drilling at Barryroe . N oting the significant value at t ributable to Barryroe and prevailing low rates for rigs and associated offshore services , we have moved forward with planning for drilling (aand possibl y a side – track)) . L ast month,, we issued a request for expressions of interest for the supply of a mobile offshore drilling unit and ha ve started the consen t process for drilling . The details on the forward dates for the planned drilling programme will be communicated once the schedule is finali s ed..
Looking ahead,, we await the decision whether TOTAL will exercise their o ption to farm – in to FEL 2//114 and we also look forward to seeing the outcome of exploration wells planned for acreage proximate to FEL 2//114,, which will test plays similar to Diablo and to those which have proved to be successful in the conjugate Flemish Pas s Basin,, offshore Canada . Regarding Avalon,, we also await the decision whether Cairn will exercise their o ption . U nder the TOTAL farm – in to Avalon , there is a lready a partial promoted carry on a contingent exploration well .
As demonstrated by our recent drilling , Providence remains the most active explorer offshore Ireland , with over 20 years’’ operati onal experience generally and specifically some 1 3 years since it first licenced acreage in the Porcupine Basin . Looking ahead,, we w ill continue to seek to capitalise on the significant and unreali s ed value of our portfolio for the benefit of our shareholders .”